Energy Transfer(US:ET)2023-05-03 02:55Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2023 was $3.43 billion, an increase from $3.34 billion in Q1 2022, driven by record volumes across various segments [101] - DCF attributable to partners was $2.01 billion, down from $2.08 billion in the same period last year, resulting in excess cash flow after distributions of $1.04 billion [102] - The quarterly cash distribution was increased to $0.3075 per common unit, reflecting a growth target of 3% to 5% annually [103][104] Business Line Data and Key Metrics Changes - NGL transportation volumes increased by 13% to a record 2 million barrels per day compared to 1.8 million barrels per day in Q1 2022 [2] - Average fractionated volumes rose by 18% to 949,000 barrels per day from 804,000 barrels per day year-over-year [3] - Adjusted EBITDA for the NGL and refined products segment was $939 million, up from $700 million in the previous year, attributed to higher margins and increased optimization [8] Market Data and Key Metrics Changes - Crude oil transportation volumes were 4.24 million barrels per day, slightly up from 4.22 million barrels per day in Q1 2022, driven by higher volumes on Texas pipeline systems [7] - The company maintained approximately 20% of the global market share in NGL exports, continuing to lead in export volumes [4] Company Strategy and Development Direction - The company is expanding its NGL export capacity at Nederland, expecting to add 250,000 barrels per day by mid-2025, with a projected cost of $1.25 billion [11] - The acquisition of Lotus Midstream for approximately $900 million is expected to enhance the company's crude pipeline footprint and increase storage capacity [22] - The company remains optimistic about the long-term growth in international demand for NGLs and is pursuing various growth projects to capitalize on this demand [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of cash flows and the ability to operate through various market cycles, despite lower natural gas and NGL prices impacting EBITDA [5] - The company anticipates a significant need for more capacity in the Permian Basin and is actively working on projects to meet this demand [81] - Management highlighted the importance of strategic growth projects that enhance the existing asset base while maintaining a balance between distribution growth and leverage reduction [27] Other Important Information - The company spent $407 million on organic growth projects in Q1 2023 and expects total growth capital expenditures for the year to be around $2 billion [26] - The company is evaluating the necessity of adding another processing plant in the Permian Basin to meet growing demand [12] Q&A Session Summary Question: Insights into the change in distribution policy - Management indicated that the distribution level will be evaluated quarterly, with a target growth rate of 3% to 5% based on business performance [18][19] Question: Update on spread opportunities and Lotus acquisition - Management confirmed that the Lotus acquisition significantly contributes to the EBITDA guidance increase, alongside strong performance in the base business [20][50] Question: Update on Lake Charles LNG project - Management expressed frustration over the DOE's denial of the extension request and plans to appeal the decision, emphasizing the project's importance [23][61] Question: Impact of lower natural gas prices on operations - Management noted that lower natural gas prices have led to some delays in expansions in the Haynesville and Marcellus regions, but long-term demand remains strong [90] Question: Future projects and potential for additional CapEx - Management indicated that while the current growth CapEx is set at $2 billion, there is potential for this figure to increase if additional projects reach FID [76]